Venezuela to auction US dollars to businesses

Venezuela's government plans to auction dollars to private businesses that sell food, medicine and other basic goods amid widespread shortages.

Planning Minister Jorge Giordani said Tuesday the initiative aims to provide such sectors the dollars they need to import goods. Products such as flour, coffee and butter have disappeared from store shelves in recent months.

Venezuela has maintained strict currency controls since 2003, creating a black market that now sells dollars at over triple the official rate of 6.3 bolivars. Falling oil exports and foreign investment have helped dry up the dollar supply.

The auctions starting next week will begin with bidding at the official exchange rate but could sell dollars for much more. The sale price will be set at an average of the highest bids, said a Central Bank official, who was not authorized to speak about the matter and asked not to be identified.

Another government-operated currency exchange system sells dollars to individuals and businesses but only at the official rate.

Venezuela’s Minister of Planning and Finance Jorge Giordani shows a graph titled "Currency auction method process" at a press conference about currency controls in Caracas, Venezuela, Tuesday, March, 19, 2013. Giordani says U.S. dollars will be auctioned off to privately owned businesses that import and sell food and medicine. Venezuela has maintained strict currency controls since 2003, leading to complaints from businesses about a dearth of dollars and creating a currency black market. (AP Photo/Ariana Cubillos)